Highways (Works for Residential Developments) Amendment Bill

Final Stages

Consideration in committee of the Legislative Council's amendments.

(Continued from 28 October 2025.)

The Hon. A. KOUTSANTONIS: I move:

That the Legislative Council's amendments be agreed to.

Motion carried.

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr TEAGUE (Heysen—Deputy Leader of the Opposition) (17:30): I was nearing the conclusion of my contribution on the second reading, having flagged three topics the subject of amendments for a committee stage. This is one of those circumstances in which that is the best opportunity to air the matters that will, I still hope, be receptive of a positive response from the government. There are many amendments, 17 in all, and they are in the three categories that I have outlined prior to the adjournment of debate earlier on. So in the interests of expedition and so forth, I will conclude my contribution at the second reading stage and we will step through those matters then at the committee.

The Hon. D.G. PISONI (Unley) (17:31): On speaking to this bill, I think it is opportune to raise the issues that strata living costs add to senior Australians in particular, and senior South Australians, of course—but senior Australians in general—and how it is time for a revision of the assets test when it comes to those who qualify for a pension or a part pension. There is no doubt that there is a move, and it is a desire by governments right around Australia, for there to be more choice in housing and to encourage people to look at apartment options when it comes to buying. One of the key markets for that, of course, is people who are downsizing: those who are retiring, whether they be self-funded retirees or whether they be partially self-funded and still qualify for either a full pension or a part pension.

Obviously, the asset test and the income test that you achieve from those assets varies, whether you are a married couple or whether you are a single person, whether you are a home owner or whether you are a renter. Renters get more; they get a higher pension. They also get a higher asset base and can earn more money before they lose parts of the pension. What is new now is the fact that strata fees are a cost that those who stay in their own homes do not have. The amount of money they can have in their own savings, in their super fund or in some other investment where they might be earning some income will not buy them as much from the return that they are getting because they need, in some instances, $12,000 or $14,000 a year in additional revenue simply to pay strata fees.

Unfortunately, this legislation does nothing about that. It is really more of a federal issue. It is relevant because there is no doubt that this legislation has been put in place to improve the strata system, but there are some key fiscal problems with what we have at the moment. Until they are addressed, we are still going to see a lag of people being prepared to sell the family home and move into a strata, particularly if they are in that sweet spot where you can get maximum pension and still earn maybe an extra $20,000 to $25,000 in income from what you have invested in your super fund. For a married couple that would be somewhere close to $500,000.

Consequently, you have to pay that extra $12,000 to $14,000 in strata fees that you have not had to pay before—and do not forget that on top of that you still have council rates, the emergency services levy and other household costs that you have with your own home that is not part of a strata. This is a brand-new additional cost that you need to find extra money for if you move into a strata arrangement.

You would need an additional quarter of a million dollars in assets in an average year to generate that sort of income in order to pay those additional strata fees and yet there has been no adjustment. The federal government has been talking about apartment living for quite some time, expecting people to move into apartments. Their language is aiming obviously at those who are starting off in the housing market and also those who are perhaps in a position where they could downsize.

It is an important message for the federal government to understand that you need to make reforms right across the sector if you want to improve outcomes and if you want to make the sector fairer. The changes that are being made through this bill are what the state government can do, and I am sure that there are more changes that they can make.

I think there are people who take issue with the fact that it is a known practice—I am not quite sure how widespread it is here in South Australia, but certainly in the Eastern States where they have had strata living for much longer—where a developer will only sell about 49 per cent of the units that they have in a new block so that they are the majority holder of votes at the inaugural AGM that appoints the strata manager. They appoint someone they are friendly with, someone that they have done business with for many years who consequently then will go to the strata sinking fund for the next 20 years for repairs that should be done under the warranty of the builder and they are giving that bill to the strata owners. This is a very serious issue and if it is not addressed here in South Australia I think you will find that there will be some risk in South Australia for those who are buying off the plan and those who are buying into a strata that is dominated by the developer.

Once that is set up, of course, it is very difficult—and anyone who has had to deal with a strata would know how difficult it is—to get the consensus of the other owners to actually change a strata manager. It is not an easy thing to do and that is something this legislation could have included to make it much easier. You almost need to work with the person you are about to sack in order to establish a new strata manager for your strata organisation.

There is a lot more that can be done to put the power back in the hands of those people who own those strata properties. The fact that we still have this ability for a developer to have such a say, if you like, of who manages that strata before the completion of the sale of those apartments, I think is a serious flaw and something that needs to be addressed.

There are two issues I have raised in conjunction with this bill: one is a job for the federal government, if it serious about offering more choice and encouraging people to take up that choice when it comes to housing and, of course, for the state government to ensure there are not unintended consequences or areas that can currently be exploited that may not have been exploited yet. I am not accusing anybody of doing that. However, when I was looking at an investment property a number of years ago, I read the strata minutes and noticed that the strata had been hit with a bill for that particular place for an outdoor garden that was for the almost exclusive use of the penthouse owner who was the developer of that property.

I would argue that that is an abuse of the strata system, either by apathy from owners or proxy votes being given to the strata manager, naively, rather than other owners, for those who cannot make the meeting. That is where that type of situation can happen. Needless to say, we were not interested in purchasing in that area because we could see that we would be subsidising the lifestyle of somebody else through the strata fees.